Nexstar Reaches Impasse In Talks With Media General After Rejection Of Its Offer

(RTTNews) - Nexstar Broadcasting Group, Inc. (NXST) disclosed that it has reached an impasse in its negotiations to acquire Media General, Inc. (MEG), following the rejection by Media General's Board of Directors of Nexstar's revised proposal that is currently valued at $16.31 per Media General share, based on Nexstar's closing share price on December 8.

Nexstar's revised proposal consists of $11.00 per share in cash (less the value of the break fee liability of approximately $0.46 per share related to Media General's Board's agreement to acquire Meredith Corporation, or a cash payment of $10.54 per Media General share) and a fixed exchange ratio of 0.1024 Nexstar shares per Media General share, up from the previous ratio of 0.0898.

The current Nexstar proposal represents a premium of 46.3% over Media General's closing stock price on September 25, the last trading day prior to Nexstar's initial offer being made public.

Media General's Board has rejected Nexstar's revised offer, which also included an agreement in principle to offer a net contingent value right or CVR that would provide Media General shareholders with cash based on the net proceeds received from the sale of its spectrum in the upcoming auctions, less any benefit that Media General shareholders would otherwise be entitled to as Nexstar shareholders from the sale of Nexstar spectrum.

"The response from Media General is disappointing as our revised offer reflects our recent confirmation of our projections for first year synergies and our continued focus on structuring a transaction that would enable the combined company to generate prodigious free cash flow that would be allocated for leverage reduction, additional strategic investments and the return of capital to shareholders," said Perry Sook, Chairman, President and CEO of Nexstar.

Media General responded with a counter proposal consisting of $11.00 per share in cash, an exchange ratio of 0.135 Nexstar shares per Media General share and the CVR. Excluding the value of the CVR, the current value of Media General's counter proposal is $18.61 per Media General share, representing a premium of approximately 66.9% over Media General's closing share price on September 25.

Sook said, "Our proposal also takes into consideration the fact that the Media General Board, without negotiating in August with Nexstar on its original proposal to acquire the company for $17 per share, reached an agreement with Meredith which created a sizeable break fee liability amounting to $0.46 per share of lost value for Media General shareholders. The counter proposal from Media General is unreasonable.